Monday, April 21, 2014

Markets rise on leading indicator data from the Conference Board

Dow went up 40, advancers over decliners almost 3-2 & NAZ shot up 26.  The MLP index climbed 3+ to the 486s (a new record) & the REIT index rose 1+ to go over 290.  Junk bond funds were mixed & Treasuries fluctuated.  Oil was treading water & gold fell to a 2 week low as signs of an improving US economy reduced the appeal of haven assets.

AMJ (Alerian MLP Index tracking fund)

Treasury yields:

U.S. 3-month


U.S. 2-year


U.S. 10-year


CLK14.NYM....Crude Oil May 14....104.29 Down ...0.01  (0.0%)

Live 24 hours gold chart [Kitco Inc.]

An improving job market & increasing factory production in Mar contributed to a jump in the US index of leading indicators that signals the pace of economic growth is poised to rebound.  The Conference Board’s index, a gauge of the outlook for the next 3-6 months, rose 0.8%, the most since Nov, after a 0.5% gain in Feb.  The 6.1% advance over the past year is the biggest since Jul 2011.  The fewest layoffs since before the last recession are helping lift consumer confidence, which probably means recent gains in spending can be sustained.  Today’s report also showed access to credit continues to thaw, making it more likely that the rebound in housing, which has showed signs of cooling, can be revived.   6 of the 10 indicators in the leading index contributed to the increase last month, led by the spread between short & long-term interest rates, a drop in jobless claims & an increase in the length of the factory workweek.  “The economy is rebounding from widespread inclement weather and the strengthening in the labor market is beginning to have a positive impact on growth,” Ken Goldstein, from the Conference Board, said.  “Overall, this is an optimistic report, but the focus will continue to be on whether improvements in the labor market can be sustained, fueling stronger economic performance over the next few months.”

Payrolls climbed in 34 states in Mar & unemployment rates fell in 21, showing the job market was making progress across the economy.  Florida led the nation with a 23K increase in payrolls, followed by North Carolina with 19K more jobs, according to the Labor Dept.  Ohio registered among the biggest declines in joblessness.  Gains in hiring will probably help lift consumer confidence & spur household spending, which accounts for almost 70% of the economy.  The Federal Reserve, in its latest Beige Book review of regional conditions, said the labor market was “generally positive.”  Over the past 2 months, Florida's payroll count has climbed by 58K, the biggest gain over a similar period in 4 years.  Nonetheless, the jobless rate rose to 6.3% from 6.2% in Feb as almost 60K workers entered the workforce.  The unemployment rate in Ohio dropped to 6.1%, the lowest since in 6 years, from 6.5% in Feb.  Missouri & New Mexico were among states with the biggest increases in joblessness last month.  Although unemployment in Rhode Island remained the highest in the country, it declined to 8.7%, its lowest level in 6 years, from 9% in Feb.  Nevada was 2nd-highest, with a rate of 8.5%, followed by Illinois at 8.4%.  North Dakota with its booming oil economy had the lowest unemployment in the nation, holding at 2.6%, where it’s been since Jan.

Payrolls Rose in Most U.S. States in March, Led by Florida

Pfizer, a Dow stock, held informal, now-discontinued talks with AstraZeneca (AZN) about possibly buying the London-based maker of asthma & heart drugs, according to reliable sources.  But the companies aren’t currently negotiating.  The talks happened several months ago & there are no plans to resume.  The discussions were supposed to hav started when PFE made a tentative approach about a takeover valuing AZN at more than £60B ($101B).  If revived, such an acquisition would be among the largest ever in the industry.  PFE has reorganized its business over the past 3 years, shuttering some research projects & emphasizing others. A deal with AZN would add early-stage drugs in a field of cancer treatments that use the body’s own immune cells to recognize and attack cancer.  PFE stock went up 60¢ & AZN jumped 5.61 (9%).  If you would like to learn more about PFE, click on this link for Trend Analysis:

Pfizer Is Said to Have Held Now-Discontinued Talks to Acquire AstraZeneca

Pfizer (PFE)

Stocks were up cautiously today.  Macro economic news has been favorable, but earnings are still iffy.  More earnings are coming this week.  A continuation of low interest rates is driving buying in yield securities, even munis.  MLPs, REITs & junk bond funds are all doing well this year.  The MLP index is up about 5% YTD, the REIT index is up almost 10% & junk bond funds rose about 5%.  But Dow is lagging, down 1% YTD.

Dow Jones Industrials

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